Commentary

New Technologies And Revenue Sources Provide Hope For Local And Regional Newspapers

by Jack Loechner , Staff Writer, August 15, 2016

According to the inaugural HubCiti Publishers’ Confidence & Technology Report, the overall confidence in the sustainability of the local and regional newspaper industry has remained virtually unchanged from last year. However, 33% of publishers believe that the industry is getting better, likely based on new technologies, new ways of thinking about their business model, and the new sources of revenue available with digital and social products and services.

Consumers of news also responded that they are more likely to view news on a mobile app or website than print, providing additional opportunities for publishers to better target readers with the advanced digital services now available.

Gregory J. Osberg, CEO and founder of Revlyst, notes that “… the main benefit that newspaper content provides is its high level of journalistic integrity, credibility and quality… news consumers are tired of clickbait stories… seeking more locally-focused stories… that they can act on in their communities… only the papers have the resources and editorial knowledge to provide that level of local content… ”

87% of publisher respondents rank print ads and classifieds as very important to revenue generation. Respondents ranked subscriptions and website as second and third, with 74% and 64%, stating they are very important to revenue generation.

Respondents ranked video as the least important to revenue, with 60% stating it was not important.

Among publisher revenue generation strategies the greatest increase in anticipated revenue generation comes from mobile apps, says the report, with a 14% increase over the next 12 months, beating out print ads, subscriptions, websites, events and video. 63% of respondents stated they believe implementing new digital services will help generate additional revenue, but only 43% have plans to implement in the next six months.

7% of respondents said they strictly use a third party for digital service implementation, with 57% stating they utilize both in-house and third party services
According to respondents, the main focus of new digital services for publishers will be website and mobile app implementation (31% and 23% respectively), with video at third place with 15%
Publishers stated they plan to see a 50% increase in revenue from both website and mobile app activity in the next 12 months, while 39% of publishers plan to hire new employees for digital service implementations, with 54% planning to also hire a third party firm.

Considering consumer responses, 36% of consumer respondents stated that they mainly received their local news from TV, and 23% said online news aggregators (with specific newspaper websites being the lowest at 5%.)

41% of respondents stated they prefer a digital version of print content compared to 26% that said they like to search for specific content, with nearly 60% stating they would not want content suggested for them.
Only 8% of respondents stated they had a high tolerance for watching an ad in order to read an article or watch a video, compared to 28% that would not watch an ad at all. Likewise, 60% said they would not pay for special digital content.
Consumer respondents chose traffic and weather updates as the top option with 46% and restaurant specials second with 15% when asked what kind of content besides news they’d like delivered to them.

RoyTruitt, CEO of HubCiti, concludes “… publishers know they need to implement advanced digital services… within the next six to twelve months every newspaper will need to ramp up mobile-digital… to meet market and consumer expectations… to redefine themselves as the source of hyper-local information of all kinds, not just news… ”

N.B. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.

For additional information from HubCiti, please visit here.

newspapers, research

5 comments about "New Technologies And Revenue Sources Provide Hope For Local And Regional Newspapers".

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James Smith from J. R. Smith Group, August 15, 2016 at 8:12 a.m.
If my memory serves correct, during the early days of newspapers' revenue decline, a common fix was laying off reporters, seemingly the prime source of what Osberg cited above as important...local and localized-national reporting. Curious that results indicated low valuation of video. Why? Back to green-eyeshades thinking, determination of cost-benefit, or simple unfamiliarity with video? How have various strategic partnering, w/local radio-TV outlets worked out? How pervasive are those?
Reply

Ed Papazian from Media Dynamics, August 15, 2016 at 9:21 a.m.

One of the more amazing aspects of the average newspaper's digital experience is the failure to exploit the fact that here, unlike the printed editions,newspapers can sell TV/video commercials to advertisers like car dealers, banks, department stores, etc on their websites. And, no doubt about it, TV/video commercials are the linchpins of these ad campaigns, not static print ads. Why so little interest by newspaper publishers? Are they using their unionized sales forces to sell digital ads, rather than specially trained people who know how to talk TV? Are they out selling the real decision makers with tailored, editorially-relevant TV/video packages? I guess that the answer, for the most part, is no.

Paula Lynn from Who Else Unlimited, August 15, 2016 at 1:28 p.m.

The union has nothing to do with it. The problem is the upper management and then move on to bad hires down the pike. The further up they are, the less they know about the business overall and the less they do. There are plenty of examples with hours upon hours of examples.

Ed Papazian from Media Dynamics Inc, August 15, 2016 at 2:02 p.m.

Paula, of course the rea ly big problem is top management, however, I have seen case after case where unionized newspaper ad sales forces have no understanding of audience or anything about advertising and act merely as order takers. And this at the largset, most successful, dailies. The unionized approach may have been forced upon publishers--- but its result is a woefully uninformed and firing-proof group of ad sellers. The only solution at the larger dailies is small teams of specially trained younger people who are able to make effective sales pitches to key target accounts. Whether this method is being applied to digital sales is what is in question----at last in my mind.

Paula Lynn from Who Else Unlimited, August 15, 2016 at 9:10 p.m.

Hell no, Ed. Sure there was a time when I saw $20,000 quarterly bonuses for ad takers, but that was management decisions, not union in a closed shop. And I have my bones to pick with the union, but this was not the big one. Sure they fought commission sales, but it took a long time for management to fight it because they would lose something, too. As far as the younger group is concerned - HA. You should know better. Our group, the oldest in the bunch and over 60, a couple of over 60, brought it home and over every month. The "cockaroaches" as one manager called the newbie younguns, were in a revolver door. Today, things are worse than ever and that goes back to management who have upped the paperwork eating up over 50% of salespeople's time.

How about a TV show about real stories in an ad department ? It would not resemble anything ever on TV before.